The FCA's incoming chair Charles Randell has been grilled over his involvement in a tax avoidance scheme, telling MPs today it was "an error of judgement".

Randell was this afternoon quizzed by the Treasury Select Committee, with chair Nicky Morgan asking him to explain how he came to take part in Ingenious Film Partners 2.

He told MPs "I regarded the fact I hadn't made sufficient investigation into assurances I was given to be an error of judgement" although he added: "I take responsibility for decision I took".

Randell confirmed he repaid the taxes at a later date, totalling £114,000 plus interest.

In a letter to Tom Scholar, the permanent secretary to the Treasury, published by the committee this afternoon, Randell said he had invested in the scheme "promoted by my financial adviser in 2006".

He added: "Despite assurances from my adviser and the managers of the partnership that HMRC were content with the partnership arrangements, HMRC subsequently opened an inquiry into the partnership tax affairs."

"I considered that my decision to invest in this partnership was an error of judgment which I regretted," the letter adds. "I did not elaborate on this at the interview but I regret failing to independently investigate the assurances I received that HMRC were content with the partnership arrangements."

Scholar subsequently wrote to Morgan saying the assessment panel "was content that Mr Randell had taken appropriate action, and concluded that this should not prevent him from being appointed to the roles of chair of the FCA and PSR2.